California Regulators Consider Breaking Up PG&E Over Safety Concerns

SACRAMENTO (CBS/AP) — California regulators said Friday they are considering drastic measures for Pacific Gas & Electric Co., including breaking up the utility over its role in recent gas explosions and wildfires.

The state Public Utilities Commission is outlining a range of options including breaking up the utility’s natural gas and electric distribution and transmission divisions; replacing part or all of the utility’s board of directors and its corporate management; conditioning its equity return on safety; reorganizing the company into regional subsidiaries; or making PG&E a public utility.

The commission hasn’t made any final decisions and is taking comments on those and other proposals through Jan. 30.

“We must be careful and practical,” Public Utilities Commission President Michael Picker said in a statement. “This process will be like repairing a jetliner while it’s in flight. Crashing a plane to make it safer isn’t good for the passengers.”

PG&E responded in a statement: “We’re open to a range of solutions that will help make the energy system safer for the customers we serve. PG&E’s most important responsibility must always be public and employee safety.”

Regulators have been examining the utility’s safety policies for years. A review was ordered in the wake of a 2010 gas pipeline explosion that killed eight people and destroyed 38 homes in a San Francisco suburb. The utility faced more than $1.6 billion in fines and penalties levied by the commission, and the utility was required to work with a federal monitor as part of a criminal proceeding.

“The direction that PG&E has been going in is not working,” state senator Jerry Hill (D-San Mateo) told KPIX 5. “It has created chaos and destruction around California. So there needs to be major change. Now, how we do that is the question that the PUC began asking yesterday.”

Officials are currently investigating whether PG&E’s equipment started the Camp wildfire six weeks ago in northern California that leveled the town of Paradise, killed at least 86 people and destroyed close to 15,000 homes. Because the cause of that specific fire hasn’t been determined, it’s not directly part of the commission’s safety examination, although regulators are considering past fires and that the utility’s service is in fire-prone areas.

“PG&E has had serious safety problems with both its gas and electric operations for many years,” read a commission order issued Friday.

Senator Hill went further. “There needs to be a cultural change at PG&E. The culture at PG&E is not about safety, it’s about profits.”